Abbott state of the state speech promises adequate road funds without tolls

Abbott state of the state speech promises adequate road funds without tollsBy Terri HallFebruary 17, 2015Examiner.com

Texas Governor Greg Abbott outlined his priorities in his first state-of-the-state address today in a joint session of the Texas legislature, and he unequivocally promised to add $4 billion a year more to roads without raising taxes, fees, debt or tolls. That’s music to the ears of most Texans, beleaguered and weary of toll roads popping up on nearly every major highway across Texas. Abbott’s predecessor, former Governor Rick Perry, made toll roads, especially those funded through public private partnerships, the centerpiece of his transportation policy for 14 years. Now it’s coming home to roost, and Texans are saying ‘No more!’ Essentially, Abbott said ‘I hear you’ and I have a plan to fix it.

To show just how serious he is, Abbott declared transportation an emergency item, allowing these funding initiatives to be fast-tracked and considered earlier than normal. The governor’s funding plan tracks with what the grassroots have been advocating for two sessions: ending diversions of state highway funds to non-road purposes and dedicating a portion of the vehicle sales tax to roads. In addition, Abbott’s plan reaches $4 billion when combined with half of the oil and gas severance tax known as Proposition 1 funds that Texas voters overwhelmingly passed last November.

Abbott recognized the need for a constitutional amendment to ensure the Texas Department of Transportation (TxDOT) “has the sustainable, recurring and predictable revenue needed to plan large-scale, multi-year construction projects.”

For those who may not be familiar with transportation law, federal planning rules require state highway agencies to produce two fiscally constrained plans: a 4-year short-range plan and a 25-year long-range plan. So unlike other state agencies, TxDOT has to show how it will fund projects 25 years from now. The 20 cent-per-gallon state gasoline tax is a fixed amount and has remained unchanged for over 20 years. It doesn’t adjust with inflation and requires a vote of the legislature to index it to inflation or increase it. There has consistently been no appetite to adjust the state gasoline tax, though some U.S. senators have recently floated the idea on the national level. Most Republicans get elected on a no new tax pledge and fear the wrath of the voters if they dare broach the subject.

Because of this fear, the GOP has turned to tolls and debt as a get-out-of-jail-free card under Perry. However, that plan backfired. Texas now leads the nation in road debt, owing $31 billion in principal and interest. The ‘user fee’ model of tolling has long since run-out, and now existing freeways are being converted into hybrids with toll lanes showing up in the middle, which are often referred to as ‘managed lanes.’ These managed lane projects can’t pay for themselves and require massive tax subsidies. This double taxes Texans to gain access to the toll lanes. Toll revenues are also being pledged from one highway to pay for or secure the financing of another, so tolls have become a general tax that government has tapped as a new revenue stream without having to actually vote for a tax hike outright.

Texas voters recognize the shell game and now consider tolls a tax, which has become the most expensive way to fund roads, and they’re holding their elected officials accountable for the runaway taxation placed in the hands of these unelected commissions and toll authorities.

So Abbott’s plan to adequately fund highways with predictable, transparent sources of revenue, and his commitment to ending the toll regime are a refreshing move in the right direction. Declaring transportation an emergency item will go a long way to getting the necessary legislative cooperation to get it passed.

As Abbott quipped in his address, “It's a sad day in Texas when a guy in a wheelchair can move faster than traffic on our congested roads.”

Well, thankfully, that’s about to change. He went on to say, “Regardless of the priorities that may exist in this Capitol, the voters made unequivocally clear their priority – they want roads funded.”